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Federal small business COVID support programs – your source of accurate information

Source: Federal small business COVID support programs – your source of accurate information

 

CFIB. In business for your business

Details still sketchy but we’re on it

The federal government’s announcement of major changes to small business support programs has created significant confusion and worry on the part of many small business owners. Understandably. The lack of detail has left many not knowing how they’re affected.

While government is moving ahead with these changes for the period ending Nov. 20th, new legislation will have to be passed by Parliament for after November. So, there’s still opportunity for us to push for needed changes.

What’s ending

CEWS & CERS
The current Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) programs are ending on Saturday, Oct. 23. Rent and wage subsidies are still available to some businesses who continue to see significant revenue losses through new programs outlined below.

CRB
The Canada Response Benefit (CRB) is ending on Oct. 23. For businesses who have struggled to get staff to return, this may be good news. CRB is being replaced with the Canada Worker Lockdown Benefit. This new benefit will provide $300/week only to those workers who are unable to work because of a lockdown.

What has been introduced

While details are limited, there are new programs to replace the wage and rent subsidies.

Tourism and Hospitality Recovery Program
While details on the full scope have not been finalized, a new program was created to provide wage and rent subsidies for hotels, tour operators, travel agencies, festivals, convention centres as well as restaurants. The Canada Revenue Agency (CRA) will determine the industry codes and types as part of their administration of the program.

Maximum wage and rent subsidy 75%. To receive this maximum, your business must experience an average revenue loss of at least 40% over 12 months (March 2020 to February 2021 as a comparison) as well as a minimum revenue loss of 40% in current month.

The subsidy starts at 40% and matches the revenue loss up to 75%.

For instance:

  • 40% revenue loss = 40% subsidy
  • 50% revenue loss = 50% subsidy
  • 75% revenue loss = 75% subsidy
  • 80% revenue loss = 75% subsidy

Hardest Hit Business Recovery Program
This program is open to businesses in all other sectors that have experienced revenue reductions of at least 50%.

Maximum wage and rent subsidy 50%. To receive this subsidy, your business must experience an average revenue loss of at least 50% over 12 months (March 2020 to February 2021 as a comparison) as well as a minimum revenue loss of 50% in the current month.

For example:

  • 49% revenue loss = 0% subsidy
  • 50% revenue loss = 10% subsidy
  • 60% revenue loss = 26% subsidy
  • 75% revenue loss =50% subsidy
  • 80% revenue loss = 50% subsidy

Lockdown support
If full lockdown measures are put into effect in your community, and you show a revenue loss of 40% or more in that period, you can access rent and wage subsidy support at the same levels at the Tourism and Hospitality Recovery Program rate plus an additional 25% on the rent portion without the 12-month revenue loss other programs require.

What’s continuing

Canada Recovery Hiring Program
This program is about to become significantly more popular as a revenue loss of only 10% is required. Businesses can receive a 50% subsidy of incremental wages (from increasing wages, hours worked or hiring more staff) compared to the spring of 2021. The program was set to expire at the end of November however an extension was announced by government to extend it to May 7, 2022.

Sickness & Caregiving Benefit
For your employees, the government announced an extension to the Canada Recovery Sickness Benefit and Canada Recovery Caregiving Benefit until May 7, 2022 with the maximum duration of each benefit extended by two additional weeks.

What’s not changing – CEBA

We’ve been going to bat to get the government to reopen the Canada Emergency Business Account (CEBA) program that provided interest-free loans of up to $60,000 to small businesses. In particular, we’ve asked them to extend the repayment period to December 31, 2024 and offer additional funding. While this has happened, CFIB will continue to push for important changes.

What’s next?

While we’re relieved the support programs haven’t ended as originally planned, CFIB has serious concerns with the proposed changes. In particular, the government has raised the bar out of reach of many businesses. Additionally, government has still not fixed the gap for newer businesses opened since March 2020.

We’re in conversation with government on all these issues. We’ll push the government and all opposition parties to lower thresholds to access these subsidies so more businesses still suffering losses due to COVID can benefit, regardless of the sector they’re in.

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